Buying New Construction
General Real Estate
You've found the area you want to live in. You've fallen in love with the model home. You've decided you can afford the one you want. Now all you have to do is sign the contract...
Buying a new construction home can be exciting. It can be a lot of fun and you may even get to watch your dream home develop right before your eyes. However, it can also be a frustrating and draining process. Having been through this experience personally and professionally many times, there are a few tips I would like to offer that can make the experience much more enjoyable for you when buying a new construction home.
1) HAVE PATIENCE
This cannot be emphasized enough. New construction projects can be filled with delays that can frustrate the most patient of people. It is helpful to go into the process with a mind-set of expecting delays. Keep in mind builders are working with multiple layers of contractors. In any project with several layers that need to be coordinated, delays are not uncommon. Also remember, the builder is generally building many homes at the same time. While it is human nature to think only about your home, it will help you to understand the big picture. Builders are running a business and they wouldn't be there to build new homes if they only focused on one at a time. Even very successful new construction companies struggle with delays.
2) INCENTIVES
Depending on what stage of the construction process you enter, builders may be willing to offer you incentives to "sweeten the deal". As a Realtor having done many new construction deals, I have found builders are willing to add incentives (to a point), in order to secure the deal. Again, they're running a business, so they are not going to give away the farm, but you may find they will do a couple extras for you when they are approached the right way. If you are in a model home with the builder's sales representative, beaming with excitement and just can't wait to sign on the dotted line, don't expect them to be piling on incentives to get you to buy - they don't need to.
3) DON'T FORGET THE DESIGN CENTER (and other additional costs)!
Most builders have a design center, or some process for selecting options. Think of it like buying a car. Sure the car may be the right price, but if you want a/c and power locks...that's going add to the total cost. New construction homes are no different. If you're buying from a tract builder, you can bet that they are selling you a base model and many if not most people will want to upgrade certain items. What is considered an upgrade vs. an inclusion will vary from builder to builder. You need to plan for this in advance. For example, you may walk in to the sales office and select a $350,000 home. But, by the time you've selected the carpet or type of wood floor you want, picked the finish for the hardware, selected the tile and cabinets you like or whatever the upgrades may be, that $350,000 home could easily be $400,000, $450,000 or more. Keep this in mind and plan for it. It may help you avoid "sticker shock" when the final price is all tallied up. One way to HELP get a feel for what to expect, is to ask what other buyers in that development (with that particular builder) are averaging percentage-wise over the base price when selecting their finishes. This isn't an exact science, but can help you get a ball-park idea how much over the base price it may cost you to add the more commonly selected upgrades.
Other costs to consider are things that the builder doesn't offer. Installing window coverings is one commonly overlooked expense. Perhaps the builder just does a small 2' x 3' patio and you want to add a larger one, or a deck later. Is the builder landscaping the entire lot?
WHY USE A REALTOR?
There are lots of things to consider when purchasing a new home. Your Realtor can help you keep track of these items and keep your eye on the big picture. I often hear the argument that buyers don't want to use an agent for purchasing new construction so they can get the builder to reduce the price (by eliminating the agent's commission). I could (and probably will) write a lengthy blog on this subject, but in short, it has been my experience that this approach doesn't work for several reasons. Often people walk into model homes, get wowed by the beautiful decor and great floor-plan, only to suffer buyer's remorse in the end. This is frequently the result of a lack of experience and professional guidance from someone representing their interests. You're not expected to be an expert at purchasing new homes. Most only do it once in a lifetime, if that. However, you can have an expert working by your side, giving you the experience and information needed to make a smart, informed decisions that will help you get that dream home you've wanted.
Hopefully you find this tips informative and helpful. There are lots of things to consider when buying a home. Having a knowledgeable and professional Realtor on your side can make a world of difference.
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